Daily we are reading news about Jet Airways, Cognizant, IBM & Siemens cutting jobs. At some point, financial uncertainty can affect anyone. That is why in Financial Planning our motto is – Contingency Fund First, then Investments. But is that it? No, there are few more steps a person can take Financial Difficulties to avoid further complications.

When we are in prosperous times we cannot imagine the times comprising financial difficulty. These can lead to a stressful environment at home and spoil relationships too. It makes you compromise the life you are used to living.

Let us go through some fundamental personal steps that you can practice during financial turmoil. Some are habits, some practice & some decision making.

Steps to avoid & fight Financial Difficulty

1. Reduce your use of debt.

There is a whole industry who says “buy now, pay later”.

Then someone inside you also yells “you aren’t getting younger. If not today then when?”

And you have a boss who is shallow, and always talk about upgrades & brands.

While you may be tempted to pay for various items with a credit card, make every attempt to resist that action. Avoid additional debt in times of financial uncertainty.

2. Reduce spending.

Difficult times require difficult actions. Decide which budget items can be eliminated or reduced.

It’s no compulsions to eat out in a 5 star every anniversary. Swiggy & a Picnic can work wonders.

This action will allow you to better control your short-term and long-term financial situation.

3. Review the safety & liquidity of your savings.

Make sure your existing investments are liquid and part of them are in safe. You may need them for an indefinite time. Speak to your Financial Advisor and discuss with him.

4. Evaluate insurance coverages.

While you may be tempted to reduce spending by reducing insurance costs, be sure you have adequate coverage for life, health, and motor vehicles.

Vehicles insurance is a mandatory thing. Also, life & health insurance are must and in active mode.

Savings can be gained by comparing various insurance companies and choosing a low-cost product.

5. Avoid financial scams.

People are desperate to bounce back when faced with financial difficulties.

This can make them more vulnerable to investment frauds, Ponzi schemes & mis-selling. Obtain complete information before taking action. Don’t rush into a “too good to be true” situation.

6. Communicate with family members.

Talking about financial difficulties can reduce anxiety. These discussions can have benefits during the crisis and can help prepare children for financial situations they will likely encounter in their lifetime. Involve them in decisions that might be necessary to reduce family spending.

7. Get Social

Do not avoid friends, relatives & gatherings. Financial Difficulty is a bad time that will pass, but friends & family is forever.

Fighting or snapping is a common response when we are in stress. You need to keep yourself calm and self assure. Remember – ALL IS WELL… ALL IS WELL.

8. Upgrade

Use this time to learn new things which you been resisting due to a filled schedule. Every time economic activity may not be a reason and skills degradation may also lead to financial stress situations. Bridge the gap!

These suggestions may be valid for every financial situation in every economic setting. Your ability to know and use wise personal finance strategies will serve you in all stages of your life and in every stage of the business cycle.

Share your strategies to beat financial difficulty or how you avoid financial stress in the comments section below.